THE TWO FACES OF THE SOCIAL ECONOMY



The Two Faces Of The Social
Economy
by Paul Leduc Browne
Eighth Conference on Canadian Social Welfare
Policy,University of Regina,Regina, Saskatchewan,June 28,
1997
The social economy burst into the headlines thanks to the two economic
summits convened last year in Québec by Premier Bouchard. However, the social
economy has actually been around for a long time. Over the past twenty years it
has once more resumed its place at the heart of debates on reforming social
security and social services throughout the industrialized world.
The term "social economy" designates the universe of practices and forms of
mobilizing that belong neither to for-profit free enterprise, nor to the
institutions of the state in the narrow sense. Essentially, it is made up of the
voluntary, non-profit and co-operative sectors. They are formally independent of
the state. Their market activities are means of achieving social development
goals that transcend the market per se. Thus defined, the social economy is
related to concepts such as "third sector."
The social economy will generate new networks of co-operation and solidarity.
It will yield new experiences of social and economic development. According to
its promoters, it is better able than the state or the market to reduce social
exclusion and poverty in a progressive and sustainable fashion. Besides job
creation and poverty reduction, the social economy also harbours the project of
building democratic civil society between the market and the state.
It is obvious that the voluntary and co-operative sectors have a long history
going back to the 19th century. The rise of the welfare state did not diminish
philanthropy, volunteering or community organizing -- quite the contrary. This
"third sector" grew remarkably under the aegis of the welfare state. There has
always been, and there continues to be, a "mixed economy of welfare." However,
the role of the social economy has evolved in line with the welfare state's own
trajectory. In the crisis of the welfare state, more and more voices, on the
left as much as on the right, believe in the transition to a welfare-society or
welfare-community.
Renewed interest in the social economy is scarcely surprising. At the
beginning of the last century, French political economist Sismondi proclaimed
the necessity of correcting political economy's exclusive orientation towards
greed, by means of a social economy geared towards the common good. In 1898,
René Worms wrote: "The social economy is a political economy made tender." Is it
not the case that we are once again talking about the social economy today
because the market economy has hardened so, has grown so much more inhuman? Many
of today's realities recall the savage capitalism of the 19th century:
impoverishment, growing inequality, neo-liberal ideology, regressive social and
economic policy. As in the past, the social economy is meant to embody the human
side of society.
The end of World War II inaugurated a thirty-year period of absolutely
extraordinary economic growth in every industrialized country. That growth laid
the foundations of the welfare state, built around male full employment and
women's domestic labour -- and their corollary, the dual systems of social
insurance and social assistance.
Around the mid-1970s, the generalized decline in the rate of business profits
and the slowing of economic growth exacerbated the conflict between employers
and the labour movement. A new model of development began to appear in the
corporate world: "post-fordism." Its characteristic features were a new approach
to markets, and new forms of organization and management. There was a move away
from the mass production of standardized goods for homogeneous markets. Instead
businesses went in for smaller-scale production of a variety of goods, for
sub-contracting, a flexible, multi-skilled workforce, team work, etc. These
changes were accompanied by the massive entry of women into the paid work force,
the rise in unemployment, and a significant increase in the percentage of
part-time, temporary and self-employed workers.
At the same time, a new model for state management of social conflicts and
problems began to be put in place. Its function was to create the conditions for
the realization of this new economic model. Governments launched an offensive
against the social, cultural, legal and political conditions that had
characterized the social-democratic compromise of the preceding decades. Turning
to the right, governments embraced neo-liberalism and monetarism. A draconian
monetary policy, accompanied by regressive fiscal reforms, led to the dizzying
growth of the national debt.
The employment and the fiscal crisis of the state were used as pretexts for
dismantling basic pillars of the welfare state, such as social insurance and
universal pensions (retirement income and family allowances). In the name of
neo-liberalism, governments adopted the social policies of the last century.
They proclaimed the need to give free rein to market forces. The promised to
subject the unemployed and people in need to those very forces -- for their own
good. To be sure, governments still administer huge social assistance systems to
keep the "deserving poor" alive and to repress "sturdy beggars." However, they
are thinking about following the example of George Bush Jr., Governor of Texas,
and privatizing those programs. Powerful transnational corporations, such as
Lockheed Martin or Andersen Consulting, are waiting in the wings to seize this
bounty.
The entire public sector is being subjected not only to privatization and
commercialization, but to post-fordist restructuring. It is a matter of shifting
from the mass production of standardized services, ruled by hierarchical and
centralized administrations, to smaller, more flexible units that are more
rooted in their localities and able to respond more quickly to the demands of
diverse and changing clients. In the health care sector, hospitals are being
restructured and closed, and a community health care model is being promoted. In
the social service field, there is a similar process under way, as the trend
towards welfare pluralism over the past twenty years has shown. In the
neo-liberal scheme of things, the relationship between the state and these new
service providers is to be governed by a logic of sub-contracting within the
framework of commercial markets or quasi-markets.
In this context, it is clear that the promotion of the "community," of
volunteer work, of the social economy, can very easily contribute to the
neo-liberal restructuring of the state, to the dismantling of the welfare state,
to the assault on public sector unions -- and therefore to the offensive against
wages, social programs and workers' standards of living. It is worth recalling
how Ronald Reagan, George Bush Sr., Mike Harris and Paul Martin have all
promoted volunteering and philanthropy. It is scarcely surprising that the
social economy should arouse suspicion, even hostility, in particular in the
labour movement.
In the tradition of Alexis de Tocqueville, associations strengthen democratic
participation -- see the recent work of Robert Putnam, which has attracted
widespread attention. Some people go so far as to see "civil society" as the
vehicle of democracy, conviviality, altruism, co-operation and innovation.
Without denying its potential, we should however avoid confusing the ideal with
the empirical. The historian Rudi Koshar has, for example, shown the role
associations (i.e. civil society) played in the rise of the Nazi movement in
Germany. Rudi Koshar, Social Life, Local Politics and Nazism: Marburg,
1880-1935, Chapel Hill, University of North Carolina Press, 1986. In Canada,
associations such as the Business Council on National Issues, the Fraser
Institute, the C.D. Howe Institute, the National Citizens' Coalition, the
Canadian Taxpayers' Federation and the Canadian Chamber of Commerce, have
spear-headed the neo-liberal offensive (see the new book by Tony Clarke,
Silent Coup: Confronting the Big Business Takeover of Canada, published
by the Canadian Centre for Policy Alternatives). Tony Clarke, Silent Coup:
Confronting the Big Business Takeover of Canada, Ottawa/Toronto, Canadian
Centre for Policy Alternatives/Lorimer, 1997. See Jane Kelsey's analysis of the
neo-liberal "revolution" in New-Zealand in her book Economic
Fundamentalism, London, Pluto Press, 1995.
Having said all this, the issue cannot be reduced to the neo-liberal
scenario. The Right has not been alone in criticizing the welfare state. Over
the last quarter of a century, a host of social movements has emerged to
struggle for new forms of redistribution, but also for the recognition of
identities which had been denied or ignored. The crisis of universalizing models
in the economic and social fields (full employment, mass production and
consumption of standardized goods and services, universal social programs) has
been paralleled by a crisis of universalism in politics and culture (e.g.
democracy reduced to universal suffrage, universal and abstract legal systems
that do not reflect the real differences in society, universalizing and
homogenizing artistic and philosophical discourses). A "post-modern condition"
has emerged. The nation-state has been confronted not only with the challenge of
globalization, of transnational capital -- but also with the challenge of new,
left-wing social movements that make the region, local community or identity
group the ground for political action and socio-economic development. A whole
range of writers For example Yves Vaillancourt in Quebec, Jean-Louis Laville,
Alain Lipietz and Pierre Rosanvallon in France, or Robin Murray and Hilary
Wainwright in Great Britain. and activists criticize the Keynesian welfare state
and propose models of democratic community development, in order to counter
neo-liberalism and move towards a more democratic, participatory, inclusive and
just state and society.
The generalization of wage labour and the welfare state did free individuals
from their traditional subjection to family, patriarchy and community. Without
for one moment wishing to go back in time, it must be admitted that neither the
market nor the state have truly been able to make up for the deficit of social
bonding, belonging and conviviality that have resulted from that emancipation.
Each of the three great sociological traditions of Marx, Weber and Durkheim has
explored the dialectic of modernity, which emancipates the individual, yet
exposes her to alienation, reification and anomie. Guy Roustang, Jean-Louis
Laville, Bernard Eme, Daniel Mothé, Bernard Perret, Vers un Nouveau Contrat
Social, Paris, Desclée de Brouwer, 1996.
Furthermore, the welfare state at its peak was based on male full employment.
It was never able adequately to meet the needs of women, the elderly, people
with disabilities, the long-term unemployed, or all those whose employment
status is irregular, temporary, tenuous or non-existent.
Just as in North America, there are moves towards a new solidarity-based
economy in several European countries. Jean-Louis Laville (with Rainer Uhm,
Bernard Eme, Silvia Gherardi, Richard MacFarlane, Alan Thomas), Les Services
de Proximité en Europe, Paris, Syros, 1993; Jean-Louis Laville (ed.),
L'Économie Solidaire. Une Perspective Internationale, Paris, Desclée de
Brouwer, 1994; Jean-Louis Laville, "Un Nouveau Contrat Social,"
Possibles, Vol. 21, No. 2, Spring 1997, pp. 106-114. In the face of
unemployment, social exclusion and public sectors unable to respond adequately,
workers and consumers in personal social services have formed new networks to
meet their needs: home care, child care, health care, public transportation,
culture, recreation, environmental work, workers' and consumers' co-operatives,
etc. They draw on their own resources of knowledge and sociability. In resorting
to volunteer work, self-help and co-operation, rather than the pursuit of
profit, they create new networks of reciprocity among themselves. In doing so,
they define and redefine their needs -- the need for what they lack and the need
for new ways of fulfilling that need. According to French sociologist Jean-Louis
Laville, they end up jointly constructing the supply and demand for personal
social services, rather than having them imposed on them. They also create new
local public spheres, spaces for public debate and reflection on social
development, in which their values, symbols and everyday practices play a key
role.
All of this is related to the tradition of self-management, of grassroots
democracy. European and North American thinkers and activists are linking the
defense of a solidarity-based economy to the demand for a reduction and
redistribution of paid working time. There is also a need to give recognition to
the enormous economic contribution of unpaid labour, in particular domestic
labour. This culminates in a movement for the rebirth of active citizenship, and
the reconstruction of a society of dense networks of participation and
belonging, but freed from patriarchal or bureaucratic hierarchies or tutelage.
It must be pointed out that those who espouse this outlook do not reject the
state: "the state is not responsible for social degradation; on the contrary,
its presence has prevented the latter from being a lot worse." Guy Roustang et
al., Vers un Nouveau Contrat Social, pp. 80-81. The point, however, is to
transform the state in keeping with new economic and social realities.
Jean-Louis Laville emphasizes the need for "hybrid" combinations of the market,
non-market and non-monetary economies, i.e. the market, the state, volunteering,
self-help and the domestic economy. The goal is to break the self-containment of
the market economy, to repoliticize it, to re-embed it in a society that is not
for its part reducible to the market. On the other hand, citizens must be
extricated from their passive situation as mere consumers of public services
designed and managed by invisible or opaque institutions. Finally, families, and
especially women, must be protected from having to bear the whole burden of
services that the state no longer can or wants to offer.
While welcoming this outlook, I would like to conclude with a caveat. The
solidarity-based economy is a possibility, but it is not yet a firmly rooted
reality. In its path sits the obstacle of a neo-liberal state serving financial
and economic groups whose interests are far from coinciding with those of the
majority. Fifty-one of the 100 biggest economies in the world are corporations.
Walmart, the twelfth largest corporation, is bigger than 161 countries,
including Israel, Greece and Poland. The combined sales of the 200 largest
transnational corporations make up more than a quarter of the world's total
economic activity -- 28.3 per cent of the world's GDP. There are 191 states in
the world. If one subtracts the nine largest (United States, Japan, Germany,
France, Italy, UK, Brazil, Canada and China), the combined GDPs of the 182
remaining countries are less than the combined sales of the 200 largest
transnational corporations. Figures compiled by Sarah Anderson and John
Cavanagh, "The Top 200: The Rise of Global Corporate Power," Washington,
Institute for Policy Studies, and cited in the CCPA Monitor, February
1997, p. 12.
As long as all economic and political power is concentrated in a handful of
corporations, can there be any hope for the social economy becoming more than
the "self-management of poverty," more than "an exercise in self-exploitation,"
to borrow Gregory Baum's words? Gregory Baum, "L'Économie Alternative,"
Relations, No. 548, March 1989, p. 41. For now, the social economy
continues to be in the contradictory situation evoked by Louis Favreau, Benoît
Lévesque and others. While popular sector groups wish to conquer "new spheres of
freedom against a technocratic power that imposes its societal choices on them,"
Paul R. Bélanger & Benoît Lévesque, "Le Mouvement Social au Québec:
Continuité et Rupture (1960-1985," in Paul R. Bélanger, Benoît Lévesque, Réjean
Mathieu & Franklin Midy (eds.), Animation et Culture en Mouvement. La Fin
d'une Époque? Sillery, Presses de l'Université du Québec, 1987, p. 260. it
remains the case that the state "is dumping ... its responsibilities on the
popular sector and self-help groups" Louis Favreau, Mouvement Populaire et
Intervention Communautaire de 1960 à nos Jours: Continuités et Ruptures,
Montréal, Centre de formation populaire/Éditions du fleuve, 1989, p. 5.; it is
reducing them to the status of sub-contractors in a new neo-liberal order. Such
is the dialectic of the social economy: at one and the same time seeking to
build more human, more convivial, more democratic, more inclusive communities --
and functioning as a cog in the neo-liberal constitution of new ways of defusing
and managing exclusion.
The will to humanize market society, by grafting onto it new institutions
based on reciprocity, echoes the social-democratic dream of humanizing the
economy by means of state redistribution. To borrow Rosanvallon's phrase, we
could call the movement for a solidarity-based economy "post-social-democratic."
Like social-democracy, however, post-social-democracy is caught in a profoundly
contradictory situation: fighting for equity, equality and reciprocity, without
however truly questioning property relations in a world in which the lion's
share of wealth -- and power -- is in the hands of a few.
The economy will never be truly based on solidarity as long as it remains
merely local, as long as broader public spheres are not added to local ones, as
long as democratic and co-operative principles do not go beyond the boundaries
of the "third sector" to invade the public and private sectors. Much more than a
"third sector" will be needed to humanize a world economy hurtling towards
ecological tragedy and human misery. The economy and state as a whole will have
to be transformed into a "social economy of free and associated producers." Karl
Marx, quoted by István Mészáros, Beyond Capital, London, Merlin Press,
1995.




Canadian Centre for Policy Alternatives


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